Ninth Circuit Stays Enforcement of California’s Climate-Related Financial Risk Reporting Law

What’s Happening?

On November 18, 2025, the U.S. Court of Appeals for the 9th Circuit issued an order enjoining the state of California from enforcing its climate-related financial risk reporting law, SB 261, while the Court hears full arguments on the merits. SB 261 requires covered entities (i.e., companies with over $500 million in annual global revenue who “do business in California”) to publish climate-related financial risk reports on their websites by January 1, 2026.¹

This news comes just days after the plaintiffs—a mix of business associations led by the U.S. Chamber of Commerce—filed an emergency application with the U.S. Supreme Court seeking to preliminarily enjoin California from enforcing both of its climate reporting statutes (i.e., SB 253 and SB 261) pending litigation on the merits.² Plaintiffs argue that the laws violate the First Amendment by compelling companies to “speak on the deeply controversial topic of climate issues.” Earlier this year, a district court rejected plaintiffs’ arguments, finding that the laws were not entitled to strict scrutiny and were likely to survive First Amendment review, and declined to preliminarily enjoin the state from enforcing the statutes. Plaintiffs sought appellate review of that decision on an expedited basis; however, the 9th Circuit scheduled oral argument on the motion for January 9, 2026—after the due date for inaugural reports under SB 261. The latest order, granting Plaintiffs’ motion for an injunction pending appeal, effectively pauses the reporting deadline.³ We have written in more detail about the district court proceedings here.⁴

The timeline below also lays out the events:

What’s Next?

We await oral argument and the 9th Circuit’s ruling on the district court’s denial of preliminary relief. We expect the climate reporting statutes to remain embroiled in litigation for some time. For now, SB 261’s January 1, 2026, reporting deadline is effectively paused.

We will continue to monitor updates to California’s climate reporting statutes and legal challenges thereto. Please contact a member of our team with questions about reporting and compliance obligations.

^{1 While the definition of “revenue” is not yet settled, in its latest public workshop held on November 18, 2025, the CARB proposed defining “revenue” using the California Revenue and Taxation Code’s (RTC) definition for “gross receipts.” Cal. RTC § 25120(f)(2).}

^{2 Codified at California Health and Safety Code §§ 38532 and 38533.}

^{3 The 9th Circuit denied plaintiffs’ request to enjoin enforcement of SB 253. Although the Court did not provide any reasoning, its partial denial of the motion as to SB 253 probably relates to that law’s much later reporting requirement, which CARB has suggested will not take effect until August 10, 2026 (i.e., likely after the Court rules on the merits of the appeal).}

^{4 We have written about California’s climate reporting statutes here, CARB’s first, second and third public workshops here, here and here, CARB’s preliminary list of covered entities here, and CARB’s draft climate-related financial risk disclosure checklist here. We also prepared a general overview video here.}